Penalty Enhancement for Hate Crimes: An Economic Analysis

Abstract

The issue of bias-motivated crimes (also known as hate crimes) has attracted considerable attention in recent years. This paper provides an economic framework in which to analyze penalty enhancements for hate crimes. It extends the standard model by introducing two different groups of potential victims of crime; potential offenders' benefits from a crime depend on the group to which the victim belongs. The conditions under which penalty enhancements are socially optimal are derived. Choosing sanctions from behind a Rawlsian veil of ignorance concerning group identity does not alter these conditions. However, the (partial) exclusion of bias-motivated illegal gains from social welfare makes penalty enhancements more attractive. This conclusion also follows from the incorporation of fairness considerations that entail a social loss from different groups facing different probabilities of victimization. The paper endogenizes this social loss using a model in which victims can engage in socially costly avoidance activities that displace crime.